MIKE SNYDER, Copyright 2008 Houston Chronicle |
January 7, 2009

GALVESTON — Citing an urgent need for cash to keep this fragile island city functioning, local leaders called on state legislators Wednesday to summon the same resolve that helped Galveston rebuild after a devastating hurricane a century ago.

Revenues from property and sales taxes and other sources are dropping so sharply that layoffs of city employees are imminent even after the city slashed spending and cut all its employees' pay by 3 percent, City Manager Steve LeBlanc told the House Select Committee on Hurricane Ike on Wednesday.

He asked that the state refund all or part of the sales tax revenues generated on the island for two years and provide a long-term, low-interest loan from an emergency fund that's now empty.

"I'm getting to the point of being, in a sense, desperate for help," LeBlanc told reporters after his testimony. "It's becoming very difficult to serve our citizens."

Mayor Lyda Ann Thomas said a major state investment in rebuilding Galveston would pay off in revenues from tourism and other sources. She urged the panel to look to the past for inspiration.

"After the 1900 storm destroyed much of our island, the city sought grand solutions at great personal sacrifice," the mayor told the panel, noting that it took years to raise the island's elevation and to build the seawall along its eastern shore.

"We could not do it alone — we looked to the state to rebate our sales taxes, and to the U.S. Army Corps of Engineers to build the seawall and dredge behind it," she said.

UTMB makes own plea

Thomas spoke at the sixth and final public hearing by the House committee, which is developing recommendations for more effective responses to disasters. State Rep. Sylvester Turner, D-Houston, who chairs the panel, said he intends to submit a report to the Legislature by the end of this month.

Leaders of UTMB, which has laid off about 3,000 employees since Ike's Sept. 13 landfall, said they will ask for $336 million in emergency funds to offset the loss of business since Ike and to pay the state's share of rebuilding expenses. An additional $500 million will come from the Federal Emergency Management Agency, said UTMB President David Callender.

With that money, plus $134 million UTMB is asking for in its standard biennial state budget request, UTMB can operate 500 to 600 hospital beds — enough to regain its Level 1 trauma center status and its prominence as a teaching and research institution, Callender said. He said, however, that some of those beds might not be on the island.

Galveston County Judge Jim Yarbrough urged committee members to remind their colleagues in Austin that even though almost four months have passed since Ike, Galveston and other coastal communities continue to struggle.

"It's going to be several years before we are close to normal, whatever normal might be," Yarbrough said.

He and Thomas urged the legislators to think boldly, perhaps tapping into the expected federal economic stimulus package to support projects such as extending the seawall, building new bridges to Bolivar Peninsula and the mainland and elevating FM 3005, which traverses the island's west end.

City's cash flow critical

LeBlanc, however, said the most pressing need is help with the city's cash flow. With projections for a 30 percent cut in revenues, he said, the city has frozen its hiring and cut discretionary spending. More than 90 percent of the members of police and firefighters' unions voted to accept the same 3 percent pay cut as other municipal employees, LeBlanc said.

Refunding sales taxes for a fixed period of time would help the city provide services, he said, while a loan from the state emergency fund could help with the 25 percent local share of an estimated $178 million cost to rebuild city infrastructure and buildings. FEMA will pay the rest.

LeBlanc said Galveston officials applied for a loan from the state disaster contingency fund and were told that the Legislature hadn't appropriated any money for the fund.

Coincidentally, Gov. Rick Perry's budget director, Mike Morrissey, told a legislative seminar in Austin Wednesday that Perry would ask the Legislature to allocate $50 million to $150 million to the fund in the session that starts next week.

The governor views that as more of a long-term preparation for future hurricanes, spokeswoman Katherine Cesinger explained later.

Many of the Galveston residents who turned out for Wednesday's hearing seemed most interested in the UTMB controversy, which has generated suspicion and ill feelings since the layoffs were announced just weeks after Ike.

Thomas drew sustained applause and cheers when she pledged to do everything in her power to "restore UTMB's former world-class status." And Turner advised the institution's leaders to work out their differences with local officials, student and faculty groups before they bring such a huge funding request to the Legislature.

Medical student Brian Massel said the layoffs had cost UTMB some if its best faculty members, threatening its ability to attract new teachers of similar caliber. And students need a large hospital on the island for clinical training, Massel said.

"We need inpatient beds to learn, and we need them immediately," he said.

There was one noteworthy point of progress in the city this week. John Sealy Hospital has reopened as a full-service hospital, nearly four months after Ike knocked it out of commission.

The UTMB hospital reopened 200 beds Monday, including those for operating rooms, pediatrics, acute care for elderly patients, transplant and critical-care services and other areas.